Examination of Witness (Questions 120-132)
MS HEIDI
BACHRAM AND
MR ADAM
MA'ANIT
1 DECEMBER 2004
Q120 Chairman: But you are not attributing
any of the 50% decline in sulphur in the US since the scheme was
introduced to the introduction of the scheme.
Mr Ma'anit: No.
Q121 Chairman: That is not an entirely
even-handed approach, is it?
Mr Ma'anit: The New York Times
itself says that many of the reductions which are being attributed
to the scheme in the United States have more to do with the fact
that very simple measures that were legally mandated, for example
installing technologies, smoke stack scrubbers and switching from
coal etcetera, were the primary motivating factors behind the
reductions in the United States. Now we have reached a situation
where those cheap technological improvements can only go so far
and industry is struggling. Now industry is saying they cannot
really do this and there are all sorts of flexibilities there:
certain sectors get permission to increase here and there, banking
allows you to hedge against the future, etcetera. The net effect
has been an increase due to the market.
Q122 Joan Walley: I am just interested
to know how much the fact that the trading was coming on stream
was the incentive to make the investment in those cleaner technologies
which could then bring about the reduction. Are you saying it
is not at all?
Mr Ma'anit: No, it was no incentive
at all. It was a legally mandated requirement that existed before
the emissions trading scheme took effect in 1990. A lot of those
things were there, they had to be integrated over a long period
of time; they existed in law beforehand. Each state has its own
extra laws which it adds to the zoning requirements for specific
industries. Those industries then had to implement those, as the
UK industries had to do with the integrated pollution and prevention
control requirements. Those were laws which were already there.
Q123 Joan Walley: It is the case, is
it not, that regulation is a very powerful driver of achieving
outcomes in terms of less pollution of whatever kind it is?
Mr Ma'anit: It is the best thing
we have.
Q124 Mr Challen: Is it your fear that
governments will ease off on regulation because they will see
ETS as the great white hope, so to speak, the great white smoke?
Mr Ma'anit: Absolutely. We have
seen that in the US already and it is increasingly clear that
the Environment Agency is under a lot of strain to modernise its
regulatory regime.
Q125 Mr Challen: Conversely, is it not
possible that if we can lock industry into this scheme, and at
the moment the US administration is probably locked into industry
in ways that we do not like but that can change, once industry
is locked into something and has given it a head of steam, so
to speak, does that not mean that, in terms of the verification
issues that you have raised and the accountability issues and
all the other things like sequestration and dumping and whatnot,
once you have this scheme up and running a lot of other people
can add to the momentum as you yourselves are doing in terms of
providing a critique, in terms of improving it, in terms of trying
to make it work in a more accountable way? Academics around the
world, universities, NGOs will all provide that critique, which
then means that you have a tourniquet on industry. Do you not
think that that process is also a naturally evolutionary kind
of way of improving it and making it more practical and workable?
Mr Ma'anit: I think in the case
of that, it is much easier to do that when government is holding
the reins. The minute you let industry itself voluntarily report
its emissions, have its own accountants verifying its emissions
portfolio or whatever, you start to take away the ability for
ordinary citizens, NGOs, etcetera, to influence the policies of
those corporations. If there is no stick, then all you have left
is the carrot of emissions trading and nothing left behind it.
There needs to be something there and there is not and the whole
premise of emissions trading is that industry does not want it
to be there, industry does not want the stick, it does not want
the regulations that are burdening it, that have been placing
undue red tape on it, that are making it very difficult to be
competitive, etcetera. It is the only lever we as citizens have
to influence the activities of polluters. If we do not have that
regulatory oversight, if we do not have that government control,
that strict control that we can rely upon and advocate and go
to committees like this and present our evidence and the committees
can then take decisions on, we then have nothing left. If all
we have is emissions trading scheme, all we can do is hope that
somebody gets a good idea and changes it.
Q126 Mr Challen: You suggested that the
UK should, as soon as possible, not accept carbon credits from
sink projects in our national climate plan. How much reliance
do you think we are going to place on sinks within the UK?
Ms Bachram: There is nothing really
clear about that at the moment but from the outside looking in
Defra has been looking into converting agricultural land to woodland,
so there is the possibility that the UK would be using sinks within
the UK. They can also be connected to sinks in the CDM through
the linking directive in the EU scheme.
Q127 Mr McWilliam: You are pretty scathing
about the role of the clean development mechanism and you feel
that it should not have been included in Kyoto. Is that predicated
on the idea that the support for cleaner technologies in the developing
world should be quite separate and targeted?
Mr Ma'anit: Yes. For example,
if we took the fossil fuels subsidies issue again, if we moved
fossil fuel subsidies and placed that money into dealing with
the debt burden of the developing world, that would free up a
lot more money for them to be able to invest in clean technologies
and any efforts we can make through CDM.
Q128 Mr Challen: Could CDM not be an
additional factor? If we have already a certain amount of money
devoted to overseas development assistance and CDM introduces
maybe 2% more, even in its flawed state at present, would that
not be worth having?
Mr Ma'anit: That is not what we
are saying in actuality in terms of the actual projects that are
being developed around the world at the moment. Many of the projects
that are receiving CDM funding are potentially receiving CDM funding—because
very few have actually been formally approved—are being
lined up in such a way that the financial impacts of the project,
the burden, is actually shouldered on the developing country itself
and whatever industry is involved from the developing country.
The actual financing flows from the CDM are negligible in terms
of financial additionality and so on.
Ms Bachram: I can give you one
example of that in the case study that we have been following
in Bisasar Road landfill site which is in Durban, a prototype
carbon fund project. A local activist there is a scientist and
she has been gathering lots of data on the project and she calculated
the so-called social economic benefits that the GCF project for
the project. It would have been more economic to put the money
that they invest in that project into a savings account than it
would be to get the benefits from the project. There are very
limited flows of investment or benefits for local communities
or for the governments in the South.
Q129 Mr Challen: I was reading in your
report about the Zafarana wind farm in Egypt which seems to have
been a very problematic project in terms of qualifying for CDM
support. I was just wondering, looking at that description of
it, whether some governments might want to reduce overseas development
assistance because they say, you can rely on CDM. They then find
that some of these projects may not qualify for CDM, so they could
fall between two stools and not get anything at all. Is there
that possibility, do you think?
Mr Ma'anit: It is one that is
happening already.
Ms Bachram: The Dutch government
have already said that they are pretty much dedicating 50% of
their ODA into CDM; they are taking it away.
Q130 Mr Challen: That is a net reduction
in funding basically.
Ms Bachram: Yes.
Mr Ma'anit: Absolutely; even though
it is illegal under CDM rules.
Q131 Mr Challen: What would be the penalties
for doing that? You say it is illegal, but are there sanctions.
Mr Ma'anit: None.
Q132 Mr Challen: None at all?
Mr Ma'anit: It is a fudge, because
they can claim that there were intending to reduce the budget
for the foreign ministry anyway.
Chairman: Thank you very much. It has
been a very stimulating session; we are very grateful. Thank you.
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